Nagaland Post- Dice Foundation series
If you were asked about the difference in the cost of a cement bag between Dimapur and Phek towns, you would rattle off a number of reasons behind the price escalation.
If you were told that the largest cement plant in the Northeast is to be set up in Phek district, you would probably think of how the price difference will now be reversed in favour of Phek town.
Globalization has finally come to reduce the cost of cement in Phek town and the huge reserves of 1000 million tons of high chemical grade limestone from Phek town will now be labelled and sold as Lafarge cement if the French Cement Giant finalises the deal with the Government of Nagaland.
This 470 crores worth of project will enable the proposed cement plant in Phek to export limestone to Myanmar for processing it as the borders fade away in the face of corporate globalization.
Will it benefit the people and will the cement be sold cheap to the locals? Or will the finished cement from across the border come back through Myanmar across the same route or come via Kolkata or Moreh? These are the immediate questions that come to mind.
However the other stark parallel of Lafarge carrying out similar projects elsewhere in Meghalaya brings many fears to the fore. Lafarge has to raise money to build and operate the plant by seeking loans from International Financial Institutions. Unlike the VI schedule in Meghalaya, Nagaland has Article 371 A.
Cross border Intl project
The cross-international border project has raised several other issues such as the locus-standi of the conveyor belt which transports limestone from quarries in India to Chatak based cement plant (in Bangladesh).
It involves mining and transport of limestone from Shella-Nongtrai villages by Lafarge Umiam Minerals Pvt Ltd (LUMPL) to the US $ 257 million LSC plant in Sunamganj, Bangladesh through a 17 km long cross-border conveyor belt.
LUMPL is a 100 % subdiary of LSC, while LSC owns 74 % of LMMPL with 26 % being with two locals of Khasi origin. They have a 35 years mining agreement with the villages.
The project was initiated in 1997 and started producing and selling cement since late last year.
The landowners in Shella and Nogntrai Villages in Meghalaya where Lafarge has the plant had challenged the land transfer approval by government claiming it violated Meghalaya Land Transfer (Regulation) Act 1971. This Act forbids the transfer of tribal land to any non-tribal.
Having given ‘conditional” permission in 2001 and now faced with the storm, the Government in 2006 stated “permission was given on the condition that in the event of non-payment of the loan by the company, the mortgaged land under no circumstances could be transferred to a person other than a permanent tribal local resident of the state,” which has only raided doubts. After all which local entrepreneur has US $ 153 million plus interests to reclaim it.
The court curbed Lafarge’s Meghalaya based subsidiaries from taking any fresh loans by mortgaging tribal lands in the state, bringing Asian Development Bank’s (ADB) first sub-regional private sector venture under its South Asian Sub-regional Cooperation programme beneath a legal cloud.
Mortgage of indigenous people’s land
Will land in Phek be mortgaged by Lafarge to secure loan from IFIs? If so, will Article 371 A be imposed to block outright sale of indigenous people’s land to a foreign company? The process of acquiring and transfer of about 12.32 lakh sq meters of tribal land and subsequent mortgage of the same to foreign banks by the company has snowballed into a controversy.
These banks are ADB, Deutsche Investitions und Entwicklun-gsgesellschaft, International Finance Corporation, European Investment Bank, International Financial Corporation, Arab-Bangla Bank and Standard Chartered Bank of Bangladesh (offshore lenders) and Calyon (the second lenders).
How much of the French connection will bring corporate Globalization in the Northeast as evident from the aforementioned case to your doorstep? There are certain legal and policy loopholes that need to be addressed before we plan the future of our resources for the sake of revenue to offset the debt trap of Nagaland or the Northeastern states as well.
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